Increased complexity within regulatory compliance is another challenge. Compliance standards under Sarbanes-Oxley, Basel II, The Patriot Act and others have created over 4,000 rules. While these new standards will eventually improve operational efficiency, integrity, reporting and disclosure within the industry, they can be an overwhelming burden without the right risk analysis software.
Certainty in Regulatory Compliance
Within lending, compliance standards require models and decisions to be fair and consistent across all market populations. Manual processes often result in:
- Inconsistencies with latest regulatory compliance changes and issues
- Non-compliance with mandates like Sarbanes-Oxley or Basel II through inability to produce a documented, secure and accessible electronic record
- An associate superseding or tweaking a risk model, causing issues to arise during bank examinations
- An inappropriately documented decision
More than ever, banks need an automated decision software solution that is consistently updated with the latest compliance standards and provides real-time customer insights and diverse, accurate data.
Scoring and Decision Management
Automated decisions should facilitate fast data acquisition from the three credit bureaus and include seamless integration with internal and external data sources. It should also provide the flexibility to change models with no hard coding.
Without automated credit scoring and decision management, banks can miss important opportunities to optimize the speed of decisions, to increase the accuracy and safety of decisions, save money on cost per decision, and improve overall information management. Manual processes raise risk in terms of losing customers due to longer wait times, approving customers who should be declined and declining customers who should be approved and decision inconsistencies across different lines of business.
Additionally, manual processes make it more difficult to seize opportunities within the under-banked segment, since in many cases information must be pulled from non-traditional areas like utility and rent payment histories.
Fraud Prevention
Fraud prevention is another formidable challenge, as criminals constantly find new holes in security as fast as old ones are plugged. Without automated decisions, your business runs the risk of fraud and non-compliance by neglecting to cross-reference against external data sources like government lists of terrorists and criminals.
Automated decision software models can detect fraudulent activity on a very complex level by cross-referencing an almost limitless amount of information. An automated system is more likely to detect signs of identity theft, such as requests for replacement cards coupled with other suspicious activity.
Key Magnum Benefits
- Decision management and analytics software that sets the standard for the industry in terms of flexibility and dependability
- Real-time data from the three credit bureaus that incorporates the bureaus’ continually changing processes, plus integration of other external and internal sources of data
- Keeps your business in step with the latest compliance standards
- Tools that empower credit managers to create and test new scoring characteristics with hard coding, thereby reducing time and expense
- Fully documented support for fair and consistent credit decisions that fulfills compliance requirements
- Powerful analytics software that assists in identifying potentially fraudulent activities
MAGNUM PRODUCTS:
CreditFlow, Workflow Management
CREDICHECK, Data Acquisition
RapUP, Data Analytics
StrategyOne, Decision Engine
Dante, Scorecard Development
Magnum Test Facility, Test/Simulation Tool